Bulstrode & Bulstrode

[2023] FedCFamC1A 101

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1) APPELLATE JURISDICTION

Bulstrode & Bulstrode [2023] FedCFamC1A 101

Appeal from:

Bulstrode & Bulstrode [2023] FedCFamC2F 31

Appeal number:

NAA 36 of 2023

File number:

NCC 4739 of 2020

Judgment of:

AUSTIN J

Date of judgment:

26 June 2023

Catchwords:

FAMILY LAW – APPEAL – PROPERTY – Where the wife appeals from final orders made under Part VIII of the Family Law Act 1975 – Where the wife’s grounds of appeal allege error by the manner in which the primary judge evaluated single expert opinion evidence – Where the primary judge was entitled to rely upon unchallenged expert opinion evidence – Appeal dismissed – Where the appeal was wholly unsuccessful – Where the respondent sought costs of the appeal – Appellant to pay the respondent’s costs of the appeal in a fixed sum.

Legislation:

Family Law Act 1975 (Cth) Pt VIII, s 106B

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) Div 7.1.6, rr 7.10, 7.11, 7.27, 12.17

Number of paragraphs:

43

Date of hearing:

26 June 2023

Place:

Newcastle

Solicitor for the Appellant:

Seton Family Lawyers

Counsel for the Respondent:

Mr Mueller

Solicitor for the Respondent:

Fowler Predny Legal

ORDERS

NAA 36 of 2023
NCC 4739 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTION

BETWEEN:

MS BULSTRODE

Appellant

AND:

MR BULSTRODE

Respondent

order made by:	AUSTIN J
DATE OF ORDER:	23 June 2023

THE COURT ORDERS THAT:

1.Leave is granted to the respondent to rely upon his Summaries of Argument filed on 25 May 2023 and 16 June 2023.

2.The appeal is dismissed.

3.The appellant shall pay the respondent’s party/party costs of and incidental to the appeal, fixed in the sum of $10,000, which sum is to be paid by the deduction of that amount from the sum due and owing by the husband to the wife pursuant to Order 4(b) made on 27 January 2023.

Note:   The form of the order is subject to the entry in the Court’s records.

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

IT IS NOTED that publication of this judgment by this Court under a pseudonym Bulstrode & Bulstrode has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

EX TEMPORE
REASONS FOR JUDGMENT

AUSTIN J:

1. This appeal is brought from property settlement orders made between the parties under Pt VIII of the Family Law Act 1975 (Cth) (“the Act”) on 27 January 2023.

2. The appeal is prosecuted by the wife with a view to increasing her share of the parties’ property by the comparatively small amount of $21,300, in circumstances where the primary judge found the net value of their assets and superannuation to be the relatively modest sum of $355,119.

3. To effect a division of their assets and superannuation in shares of 55 per cent to the wife and 45 per cent to the husband, the primary judge ordered the husband to pay the wife $91,880, but she seeks a remedial order in the appeal compelling the husband to instead pay her $113,180.

4. For the reasons which follow, the appeal is dismissed with costs.

   Background

5. The parties married in 2000.

6. During the marriage, the husband established two corporations as vehicles for the conduct of a business. The first, B Pty Ltd (“B Pty Ltd”), owned and operated the business. The second, C Pty Ltd (“C Pty Ltd”), owned the vehicles and equipment used in the business. The husband was the sole director and shareholder of both corporations.

7. The timing of the parties’ separation was contentious. The husband alleged July 2013, but the wife alleged July 2015. The primary judge found the latter (at [62]).

8. The wife commenced proceedings seeking property settlement relief in December 2020.

9. During the proceedings, orders were made for the appointment of two single experts to provide expert valuation evidence. Mr E was appointed to value the vehicles and equipment of C Pty Ltd, while Mr D was appointed to value B Pty Ltd and C Pty Ltd, taking into account Mr E’s valuation evidence.

10. In July 2022, the husband transferred to his mother his shareholding in C Pty Ltd and other assets of B Pty Ltd. She was then joined to the proceedings as the second respondent in October 2022. The wife sought an order under s 106B of the Act setting aside the transfer to the second respondent of the husband’s shares in C Pty Ltd.

11. The proceedings were heard in November 2022 and judgment was delivered in January 2023.

12. The primary judge brought the husband’s shareholding in C Pty Ltd and the chattels of B Pty Ltd back into the matrimonial pool of property, found contributions favoured the wife over the husband in respective proportions of 55/45 per cent (at [165]), and found no adjustment to their contribution-based entitlements was warranted (at [181]).

13. On the premise of those findings, the primary judge set aside the transfer of C Pty Ltd shares and B Pty Ltd assets by the husband to the second respondent (Orders 1, 2 and 3), ordered the husband to pay the wife $91,880 (Orders 4, 5, 6 and 7), ordered the husband to return some photographs to the wife (Order 8), and otherwise ordered the parties to retain their personal property and bear responsibility for their own debts (Order 9).

14. The orders mirrored those sought by the wife, save that she wanted to be paid $200,000 (at [36]), whereas the husband proposed the dismissal of the wife’s application and no property settlement orders at all (at [37]). The second respondent sought to keep the assets transferred to her and resist the wife’s application under s 106B of the Act (at [38]).

    The Appeal

15. The second respondent was neither joined to the appeal nor sought to intervene.

16. The appeal comprises three grounds.

17. The first two grounds allege error by the manner in which the primary judge evaluated the single expert opinion evidence.

18. The third ground contends for inadequate reasons.

19. On 16 June 2023, the husband filed an Application in an Appeal seeking, first, leave to rely upon his Summary of Argument which was filed one day late, and secondly, leave to rely upon supplementary written submissions. The wife commendably acceded to the application, which is consequently granted.

    Grounds 1 and 2

20. These grounds are pleaded as follows:

    1.The Trial Judge failed to properly consider the single expert evidence with respect to the value of the companies known as [B Pty Ltd] and [C Pty Ltd].

    2.The Trial Judge erred in finding the single expert valuation provided by [Mr E] dated 18 August 2021 was revised down by way of an updated report on 8 November 2021 or any other date.

21. The wife had contended that the combined value of B Pty Ltd and C Pty Ltd was $325,311 (at [86]). Since both corporations were used as the vehicles to conduct one business, the wife dealt with them as the one entity in the litigation.

22. The primary judge observed that Mr D originally valued B Pty Ltd and C Pty Ltd at $261,411 (at [92]), but that valuation included the C Pty Ltd assets originally valued by Mr E at $185,881.

23. After Mr D’s original valuation, Mr E provided another report revising the value of C Pty Ltd’s assets down to $145,081 (at [93]). Acceptance of the diminished value of those assets would necessarily require re-calibration of Mr D’s valuation.

24. The wife engaged a shadow adversarial expert to value a custom-built trailer owned by C Pty Ltd, who reported the trailer was worth much more than the value ascribed to it by Mr E (at [94]). The wife then invited Mr E to re-consider his valuation of the trailer in light of the shadow expert’s report. Mr E did so and increased his valuation of the trailer to $30,000 from $12,000, resulting in an overall increase by $18,000.

25. In advance of the trial, the parties invited Mr D to revise his original valuation opinion. The wife did so unilaterally in reliance upon her adversarial expert’s opinion. The husband then did so unilaterally in light of Mr E second report and the $18,000 variation after his consideration of the opinion expressed by the wife’s adversarial expert about the trailer. Mr D responded to each party with varied opinions, depending upon the actual underlying value of C Pty Ltd’s chattels.

26. Relevantly, Mr D confirmed that, if he acted on the amended opinions of Mr E, he would revise his overall valuation of B Pty Ltd and C Pty Ltd up to $240,684. Correspondence confirming those interchanges was annexed to Mr D’s trial affidavit.

27. At trial, the wife tried to rely upon the valuation opinion expressed by her adversarial expert, but the primary judge correctly noted how leave to adduce adversarial expert evidence had neither been sought nor granted (at [96]). Such leave was required by rr 7.10 and 7.11 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”).

28. The primary judge accepted the expert evidence given by both single experts and found the combined valuation of B Pty Ltd and C Pty Ltd to be $240,684 (at [99] and [149]).

29. In the appeal, the wife abandoned reliance upon the opinions expressed by her adversarial expert and only contended the primary judge ought have relied upon Mr E’s first report, quantifying the value of C Pty Ltd’s assets at $185,881. She submitted his second report, comprising the revised valuation of $145,081 was:

    8.…not produced on joint instructions but, instead, in response to questions put to him by the [Husband].

    9.The documents upon which the [Husband’s] questions and [Mr E’s] second report rely are a collection of “vehicle repair reports” prepared by “[F Pty Ltd]”.

    10.The source or basis of these documents, and the asserted facts upon which they rely, was never put in evidence at trial by the [Husband]. The [Wife] never conceded the documents or any facts upon which they rely.

    …

    12.…the Trial Judge could not rely, and should not have relied, upon [Mr E’s] second report.

30. Some harsh realities preclude acceptance of those submissions.

31. First, Mr E’s two reports and his correspondence with the parties’ lawyers were annexed to his affidavit, all of which was adduced in evidence without any objection. In fact, the wife foreshadowed in the Case Outline document she filed in advance of trial that she expressly relied upon the affidavits filed by both single experts. The primary judge correctly recorded she did so (at [41]). In truth, the single experts were most probably the Court’s witnesses, because procedural orders were made for their appointment, but that does not detract from the wife’s reliance upon their opinion evidence.

32. Secondly, neither party sought to cross-examine either single expert on their opinion evidence. Accordingly, their evidence was entirely unchallenged.

33. Thirdly, nor did the wife cross-examine the husband about the truth and accuracy of the additional information upon which he posed questions to Mr E, resulting in his second report.

34. Fourthly, the wife’s criticism of the husband for unilaterally posing questions to Mr E is hypocritical when she did exactly the same, even before the husband did so. Perhaps that is why no complaint was raised about it in submissions to the primary judge. Even though Mr E’s second report was produced in answer to questions posed, and information provided, by the husband rather than by the parties jointly, the process was transparent. The wife was privy to the questions and the answers in advance of the trial. The husband was certainly entitled to pose questions to Mr E for the purpose of clarifying his evidence (Div 7.1.6 of the Rules) and the answers given by Mr E in response to such questions were taken to be part of his report (r 7.27(4)(b) of the Rules).

35. In her Case Outline document, the wife foreshadowed making final submissions imploring the primary judge to act on Mr D’s valuation evidence, preferably based on Mr E’s first report and her own adversarial expert’s higher valuation of the trailer, but alternatively, based on Mr E’s first report and his concession of the increased value of the trailer by $18,000. In final submissions, the wife actually petitioned the primary judge to act on the second of those alternatives, but she offered no explanation at all as to why the lower valuation in Mr E’s second report should be entirely ignored. It may be implied she did not want the primary judge to rely upon the second report, but advanced no reason at all as to why her Honour must, or even should, not do so.

36. In the appeal, the wife contends that, had the primary judge acted on Mr D’s opinion, based upon acceptance of Mr E’s first report and his later concession of an $18,000 increase, her Honour would have arrived at the proper valuation of $279,411 for the combined value of B Pty Ltd and C Pty Ltd, instead of the valuation of $240,684. The difference is $38,727, of which $21,300 represents the wife’s additional 55 per cent share.

37. Simply stated, the primary judge was entitled to rely upon the unchallenged expert opinion evidence and it would have been odd if her Honour did not act on Mr E’s more recent valuation opinion expressed in his second report, subject to the $18,000 variation in respect of the trailer, as occurred. These grounds fail.

    Ground 3

38. This ground complains of inadequate reasons, but the wife’s Summary of Argument reveals her complaint only extends to an asserted inadequacy of reasons about why the primary judge acted on the valuation evidence given by Mr E in his second report, rather than that in his first report. The ground therefore does not usefully expand upon the first two grounds. The primary judge’s reasons explain logical reliance upon Mr E’s latest unchallenged report.

    Disposition

39. The appeal is dismissed.

40. In the event of dismissal of the appeal, the husband sought the wife’s payment of his costs on a party/party basis, assessed by him at $18,480.35.

41. He should have his costs, but not that amount. The appeal was wholly unsuccessful and really ought not have been brought. The wife accepted she should bear the costs if the appeal failed and confined her objection to the quantum of the claimed costs.

42. The wife assessed her party/party costs of the appeal at $12,534.26, which she might now regret spending to prosecute the appeal over only $21,300. In any event, the husband’s costs should not be more than the wife’s. The appeal was relatively simple and the husband’s assessment covered work, the cost of which should not be visited upon the wife – for example, court appearances not actually made and preparation of supplementary written submissions and the interlocutory application for leave to rely upon them. In reliance upon r 12.17(1)(a) of the Rules, the husband’s party/party costs are fixed at $10,000.

43. It was agreed such costs could be paid by the deduction of $10,000 from the sum payable by the husband to the wife in final satisfaction of the property settlement orders.

I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Ex tempore Reasons for Judgment of the Honourable Justice Austin.

Associate:

Dated:       26 June 2023